FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Assistant General Manager
SUBJECT:
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SEWER SERVICE RATE STUDY
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GENERAL MANAGER'S RECOMMENDATION
recommendation
RECOMMENDATION: Recommend to the Board of Directors to:
A. Approve a Professional Consultant Services Agreement to HDR Engineering, Inc. to provide a Comprehensive Cost of Service Rate Study Specification No. CS-2021-1287BD, for a total amount not to exceed $234,950; and
B. Approve a contingency of $23,495 (10%).
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BACKGROUND
Since 2002, the Orange County Sanitation District (OC San) has a completed a rate study every five years to determine customers' fair and equitable share of collection, treatment, and disposal costs, develop an accurate rate model, and establish a new five-year rate schedule which ensures full cost recovery and provides support to the Proposition 218 notifications.
For the 2022 rate study, staff has requested a comprehensive rate study on all fees and charges including annexation fees and urban runoff fees.
This comprehensive rate study allocates costs to Flow, Biochemical Oxygen Demand (BOD), and Total Suspended Solids (TSS) for the purpose of billing different customer classes, including high flow and high strength dischargers.
RELEVANT STANDARDS
* Ensure the public's money is wisely spent
* Stable rates, no large unforeseen rate increases
PROBLEM
OC San's current five-year rate schedule will end as of June 30, 2023.
PROPOSED SOLUTION
Approve the Professional Consultant Services agreement with HDR Engineering, Inc to complete a comprehensive rate study to establish the next five-year rate schedule.
TIMING CONCERNS
In order to meet the legal requirements of Proposition 218 so that the new Ordinances are adopted and the rate schedule is effective July 1, 2023, the rate study should begin no later than the beginning of May 2022.
RAMIFICATIONS OF NOT TAKING ACTION
The rate study would be delayed which could potentia...
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